Television

BBC Worldwide profits up 24 per cent to £111 million

28 Jun, 2007 - 04:36 PM IST | By indiantelevision.com Team

MUMBAI: BBC Worldwide, the commercial arm of UK pubcaster the BBC, has published its Annual Review for 2006-07. Profits are up 24 per cent to £111.1 million. It recorded sales of £810.4 million including BBC Worldwide’s share of joint ventures (2005-06: £785.1m).

The proportion of sales to outside the UK was up by five per cent year on year to 46 per cent. Investment in BBC-commissioned programmes was also up at £96.3 million from £89 million in 2005/06, with total programme investment at £103.6m.

Highlights of the year include continued strong profits growth, healthy international sales of hit shows and formats around the world, the refreshing of the company’s wholly owned channel portfolio and laying the foundations for strong digital revenue growth.

BBC Worldwide CEO John Smith says, “BBC Worldwide has achieved a three-fold increase in profits in the last three years. We have exceeded expectations in most of our businesses over the past 12 months, reflecting healthy returns from our new Channels business, strong TV catalogue sales and growing demand internationally for BBC formats. We are now investing to build our digital offering and strengthen our position in markets such as the US, China, India and Australia, creating one of the world’s premier content networks.”

BBC Worldwide non-executive chairman Etienne de Villiers says, “BBC Worldwide has reached a watershed. It has proven capable of delivering against a demanding business plan with commercial efficiency; it now is poised to grow significantly with new product lines and in exciting markets.”

BBC DG Mark Thompson says, "BBC Worldwide continues to deliver excellent returns for licence payers from the content they help fund us to make. Its success is increasingly critical to our ability to invest in original creative programming for audiences in the UK, and the company is playing major part in taking those programmes out to the rest of the world."

Global Channels recorded sales of £169 million and profit of £20.9 million. 28 channels are available in over 259 million homes around the world, broadcasting in 15 different languages. New BBC-branded channel portfolio was developed. These are BBC Entertainment, BBC Knowledge, BBC Lifestyle, CBeebies and BBC HD.

BBC Entertainment replaced BBC Prime in Hong Kong, Singapore, South Korea, Thailand and Malaysia. It launched in India earlier this year together with the pre-school brand, CBeebies.

Global Channels joined forces with the distribution and ad sales teams from BBC World allowing the teams to present a single face to market for all six BBC-branded channels. UKTV, the joint venture with Virgin Media, had a good year with its Sky carriage deal being renewed, commercial audiences growing by 18 per cent and an ad sales performance above the market average.

BBC Worldwide recorded global TV sales of £216.4 million and profit of £40.2 million. BBC Worldwide TV sales and content and production revenue broadly accounted for 38 per cent of total UK TV exports last year (compared to 32 per cent the previous year).

The year’s most successful new titles included Doctor Who, Robin Hood, Torchwood, Life on Mars, 9/11 – The Twin Towers and Planet Earth. The latter was viewed in 95 countries and territories and grossing in excess of £22m in global sales to date.

Sales to Europe (ex-UK) were up by 23 per cent from £46.5 million to £57.1 million, aided by a country by country analysis of market tastes and tailored sales strategy.

Sales to the Americas were up by 17.2 per cent but profits were impacted by a high proportion of co-production deals on which BBC Worldwide makes lower margins and the US dollar weakening against sterling.

In the rest of the world profits were up 26.9 per cent although the strong pound had some impact on results. The BBC’s first ever co-production with China was secured – Wild China with CCTV. In Australia drama was a particularly powerful revenue driver.

The key event of the year remains BBC Showcase. This, BBC Worldwide says, is the world’s largest trade event hosted by a single distributor. In February 2007, the event boasted 600 hours of new content and attracted over 550 buyers from all over the world. BBC Worldwide’s catalogue now includes 2000 hours of programming available for digital distribution and over 220 hours of High Definition content.

BBC Worldwide’s FM radio joint venture with Mid Day Multimedia Ltd saw the re-launch of the radio station in Mumbai, plus new stations launching in Delhi, Chennai and Bangalore.

In the Content and Production division sales were £52.9 million. Profit was £9.5 million. Growth was driven by the success of Dancing with the Stars, a hit in over 41 countries. Existing formats continued to deliver, such as Weakest Link in France, Friends Like These and The Generation Game in South Africa, and It Takes Two and Honey We’re Killing the Kids in Australia and New Zealand.

Just the Two of Us became the first BBC entertainment format to be licensed to a Chinese broadcaster (Hunan TV). In Australia, where it plays as It Takes Two, a second series launched in 2007. The format has also been licensed in Belgium, the Netherlands, Turkey, Russia, Croatia and the Ukraine. A joint venture deal was announced with Australian independent producer, the Freehand Group. A worldwide network of local production offices was planned. BBC Worldwide is also developing loveearth.com, a natural history portal to support the launch of Earth the movie in autumn 2007/08.

Magazines sales were £171.3 million and the profit was £20 million. The firm says that the magazines division performed well in a flat market, growing its circulation revenues and increasing its share of advertising revenues. One in four UK adults reads a BBC title every month. The year’s best-performing magazines were Top Gear, Good Food, Doctor Who Adventures and CBeebies Weekly in terms of circulation growth. Subscriptions across portfolio now up to 650,000. International licences up to 33 across 57 territories.

Worldwide Media, a JV with the Times of India, secured licence to publish Hello! in India in May. Magazine websites bbcgoodfood.com and radiotimes.com were improved and relaunched. Countryfile magazine will be launched later this year.

Losses in children magazines (previously a stand-alone business) continued and the business was moved into Home Entertainment where it can benefit from the combined management expertise in publishing and licensing. Sales from merchandising licences grew to almost £9 million (highest level for five years); Doctor Who was the fastest-growing licence in the UK children’s market in 2006.

Digital media sales were £13.9 million. The division concluded a series of video on demand (VOD), web distribution and mobile deals around the world. New VoD customers included Netflix in the US and Telstra Big Pond in Australia. Investments went into key propositions bbc.com and the commercial media player. Digital Media is now responsible for the delivery of new websites or the re-launches of existing sites across all areas of BBC Worldwide.

A global content agreement was announced with YouTube in March. Four million videos were viewed on the BBCW channel on YouTube in its first month of operation. New mobile clients included mobile operators TU Media in Asia, Vodafone’s New Zealand network and the 3 network in Ireland. BBC Motion Gallery, which is BBC Worldwide’s TV clip sales business, announced a clip distribution deal with China’s state broadcaster, CCTV.